All participants are on a listen only mode. The presentation will be for approximately 10 minutes, followed by Q&A. If you have a question you'd like to submit, please type it in using the Q&A function of the Zoom app. Please note, this session is being recorded. On behalf of Aroa today, we have the CEO, Brian Ward, and CFO, James Agnew. I will now hand over to Brian and James. Please go ahead.
Thank you. Thank you, Nita, thanks to everybody for joining the quarterly this morning. It's gonna be a relatively quick run-through. Just quickly, those people that are new to Aroa, we're a well-established, high-growth, soft-tissue regeneration company, selling four products predominantly in the U.S., everything based on our AROA ECM technology platform. The total addressable market for our products in the U.S. is in excess of $3.5 billion. We sell through our own direct sales force in the U.S. and also through our commercial partner, TELA Bio. More recently, we've been working on a new technology platform, which is our ENIVO tissue acquisition platform. The company is about almost 300 people, most of those people are based here in New Zealand.
That's manufacturing, development, corporate function, marketing, regulatory quality, and in the US, we have a sales operation. Just to go to the financial highlights. Cash receipts from customers increased to $13.2 million in the last quarter, up from $12.3 million. Net, net cash outflow from operations, $4.8 million, compared to $1.9 million in the previous quarter. This is in line with expectations. It represents some end-of-year payments and also, you know, what we expected in terms of sales and marketing expenses in the first quarter of this year. Also, our revenue for the Q1 of the, of the year as well. Net cash outflow from investing activities, $1.3 million.
This re- represents additional investment into our, our manufacturing plant and equipment. Again, in line with our internal budget. We finished the quarter with a strong cash balance, $38.5 million. On plan, where we expect it to be. Operational highlights. You know, we continue to have good success in the US, with our Myriad products. You know, particularly in the last quarter, some, you know, large hospital systems, we've had some key wins. We're now in the Cleveland Clinic system, Case Western, Ohio State University, and Better Health System. Now this is, this comes from some really good foundational work being done over the last 12 to 18 months, that is beginning to get us into some very large hospital systems.
Field sales representative productivity continuing to improve in line with expectations. We now have eight of our field reps that are on average run rate of over $750,000 per annum. Again, you know, tracking very well. Symphony launch has gone in line with plans. This is a core point within the hospital system, their outpatient departments. We've focused our launch within those hospitals where we already have a presence. We're seeing the results that we expected at this stage within the year. I'm very happy with how that's proceeded. On Symphony, you know, we've recently seen an announcement from CMS with regard to the reimbursements for next year.
They're gonna remain unchanged, the outpatient department and the physician office, over the next year. You know, this is, you know, consistent with what we would, what we thought would be happening with the outpatient department, where we're focused. We did expect to see a change within the physician office. You know, we, you know, and still expect to see something over the next couple of years. We don't see this as having a impact on our launch or on our sales trajectory for Symphony over the next 24 months. Those changes within the physician office, you know, may still come into place.
If they don't, then we are seeing regulatory measures, which are being introduced, predominantly with regard to, auditing, the requirement for ASP reporting, to stop some of the gaming around that, and also some changes in, with some products requiring, new clearances for those products, through the FDA. We think, all of these measures collectively are going to help change the landscape, in the physician's office over the next couple of years. You know, not really a big impediment in the short term, but hopefully some upside, downstream over the next couple of years there. We, you know, we've now treated our first patient, with the ENIVO system, in mastectomy. That's gone extremely well, and that's the first of 10 patients.
That study has been undertaken here in New Zealand at Middlemore Hospital. We've also had two clinical publications of note published in the last quarter. One of those using Myriad Matrix to treat anal fistula. We saw very good healing rates in this condition. Now, this is a condition that's very difficult to treat and often products fail within this. We've also recently published a study using Myriad Matrix in a pressure injury algorithm. We brought together a group of physicians to look at the use of Myriad and how that would be used in pressure injury reconstruction. This is a publication that's recently been published.
I think the highlight with both of these publications is that Myriad is being used in conditions that are very contaminated, contaminated sites, so very difficult sites to treat. These wounds are very, very inflamed. What we're seeing with Myriad is that it performs very well in these types of indications. If you look at the spectrum of severity of soft tissue reconstruction, these procedures are at the top end of that spectrum. You know, not only is it good for treating these particular conditions, but I also think it gives surgeons the confidence that Myriad performs well where there is contamination of a site. That's in many of the procedures where Myriad is being used.
We continue to make very good progress with our Myriad registry, so we're now up to 183 patients. That's up 24 since the last quarter. We now have 5 study sites up and going, so we've added an additional site over the last quarter. Just to touch on guidance, at this stage, no change to our guidance. Product revenue still expected to be between $72 million and $75 million, gross margin increasing to 85%, and we expect to finish the year with a normalized EBITDA of $1 million-$2 million. You know, very confident in how we're tracking for that guidance. I'm gonna hand it back to you, Nita, and you're happy to take questions.
Thanks, Brian. Okay, we will now move on to the Q&A session. The questions are based on those sent over by email or submitted via the Q&A function on Zoom. If you have any questions, please send them through. One question that we received is around the improvement in Myriad sales and what you might think are the factors contributing towards that?
I think there's a couple of things. I think, you know, growing clinical evidence and experience with our products, and, you know, we are seeing Myriad perform, you know, very well in a wide range of soft tissue reconstruction procedures. I think that the evidence is certainly growing on that. I think also increased success from our sales team. You know, our salespeople have now been in their territories for longer, and we sort of expect to see those territories mature, and we're certainly seeing that as well. I think that's helping. You know, we're also, you know, getting into some new territories, introduced some new hospitals as well. I think it's a, it's a culmination of all of those things, you know, building momentum with Myriad.
Thank you, Brian. There's another question that sort of noted Coloplast's recent acquisition of Kerecis for about $1.3 billion, and the question is around: What impact or significance do you think this has on the biologics industry?
Yeah, I think it's, you know, great to see strategic investor acquiring, you know, a smaller biologics company. I think what's notable about this is a couple of things. I think it really underlines the utility and use of biologics in soft tissue reconstruction. It really validates the market opportunity for these products. I think, you know, the valuation is a very strong valuation. I mean, you know, it's certainly 13, 14x revenue. You know, that's, you know, very good benchmark, I think, for, you know, high-growth company, like Kerecis, but I also think, you know, like Aroa Biosurgery.
You know, I think it's, it's certainly a good marker for the market opportunity and a good marker for, valuation and a good marker for the prospects. You know, if I think about Aroa in compared to Kerecis, you know, certainly from a, a technology perspective, you know, we think we're very well placed, you know, to be, you know, superior to, to Kerecis. I think it provides a lot of confidence to Aroa that there's a, very strong opportunity in the future.
Okay. Thank you, Brian. Another question has come around, you know: when does Aroa expect to focus more on EBIT, and reduce R&D spend accordingly?
Yeah, look, I think, we are focused on EBIT, and I think this year, for the 2nd year, we'll be on a normalized basis, EBITDA positive. I think if you look forward to the next financial year, we have a continued growth in our top-line revenue, and, you know, expenses, you know, similar level of expenses in R&D, a growing, growing investment in our sales and marketing. You know, we're gonna be, still be, we're gonna be strongly, EBITDA positive next year. You know, the way I think about development expense is, you know, we're making an investment there, in the medium to long-term prospects for the company. We think that there's a lot of strategic sense in that ongoing investment into our ENIVO platform.
You know, even despite that, we will be strongly EBITDA positive next year. I think the other thing to note with that is, if we backed out that expense from ENIVO over the last 2 years, we would have been strongly EBITDA positive anyway. You know, it's really about investing in the long term, investing in the success of the company. We're also well placed to do that because we have a strong cash balance.
Thank you. Thank you, Brian. There's been a question around ENIVO, and what is the pathway towards commercialization, and when do you expect to see, you know, when do you expect to launch in market and see material revenue?
... Yeah, we're working through the final clearance for ENIVO, and there's a couple of pathways possible. I think, if we go down the De Novo pathway, we're probably, you know, 24 months away from commercializing that product. There's also a potential pathway that's much more straightforward, through a 510(k). We're investigating that at the moment. That would bring ENIVO to the point where it could begin to be sold in the coming financial year. You know, irrespective of which way, which way it's cleared, you know, we do see ENIVO as being a medium-term revenue opportunity. You know, it's about having a very full pipeline for the next 5 years, and being able to create a lot of value in the future.
You know, ENIVO is not a short-term story, it's a medium to long-term story. In the meantime, you know, if you look at our other products, like Symphony and Myriad, they're really only just getting started. We have a, you know, Myriad, we have less than 2% of the total market for Myriad. There's a long way to run with that. We think, you know, the prospects for that are very strong. You know, the importance of ENIVO in terms of revenue over the next couple of years is, is quite small.
Thanks, Brian. In one of your previous questions, you touched on cash flow, and that Aroa has strong cash flow, cash position at the moment. There's a question around, you know, what were the elements contributing to a sort of, a higher cash outflow this, this particular quarter?
James, do you want to take that? Yeah.
Yeah, look, by no means is the cash burn this quarter reflective of our recurring, recurring cash burn. It's definitely not. I think a couple of things is, you know, we had a reduction in our working capital, so mainly in the sort of payment of sort of annual, annual expenses. For instance, employee short-term incentives was one. We also increased our inventory and raw materials, and, I mean, that's just a matter of timing, right? We're sort of purchasing raw materials, you know, 2-3 times a year. That was one aspect.
I think also it was just the quarter that we, we actually expected an operating loss for this quarter. That was really sort of driven by reasonably one-off expenses across, you know, clinical development, a bit in R&D, but also it was conference season in the US. We spent, you know, a large part of our budget in, in marketing this quarter for the year. Again, I'd just like to reiterate, it, it's, it's relatively one-off this quarter. Again, you know, if you look at our guidance for the full year, you know, we're still looking at a relatively, you know, low, low cash burn.
Thanks, James. It looks like there was an increase in cash receipts this quarter. The question is: How many sales reps, you know, are we planning to invest in in the coming year?
Yeah. At this stage, we're budgeted to add 5. You know, we're in the process of recruiting sales reps. There is a little bit of churn in the sales reps numbers, but that's within line with expectations. You know, it might be that when we get to the mid-year point, you know, we may revisit that number, but I think that's really. You know, we're banking under at least 5 this financial year, but we could up that.
Thanks, Brian. I'll just take a moment to pause. If there are any further questions, please send them through. It looks like we don't have any further questions today, I'll hand it back to Brian for closing comments.
Great. Thanks, Seema. Look, we're, you know, we're, we're pleased with how the Q1 gone. Tracked in line with where we expected to be. Really, thrilled with the momentum that we're seeing with Myriad. And, yeah, I think we're on track, you know, for the year for, for where we want to be. Thanks, everybody, for joining, and, yeah, we'll certainly, catch up with you at the half year. Thank you.